Sales drop; rebound expected

Decline viewed as an anomaly; government shutdown downplayed

Associated Press

Published 5:40 pm, Tuesday, October 1, 2013

Photo: Steven Senne

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In this Wednesday, Sept. 18, 2013 photo Chevrolet passenger cars form a row on a dealer's lot in Needham, Mass. U.S. auto sales for September are released on Tuesday, Oct. 1, 2013. (AP Photo/Steven Senne_ ORG XMIT: NYBZ110 less

In this Wednesday, Sept. 18, 2013 photo Chevrolet passenger cars form a row on a dealer's lot in Needham, Mass. U.S. auto sales for September are released on Tuesday, Oct. 1, 2013. (AP Photo/Steven Senne_ ORG ... more

Photo: Steven Senne

Sales drop; rebound expected

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Detroit

Automakers expect little impact from the federal government shutdown, and they predict a fourth-quarter rebound after a rare sales decline in September.

Auto sales dropped 4 percent from a year ago to just over 1.1 million, mainly due to a calendar quirk that pulled Labor Day weekend transactions into August's numbers. The drop ended a 27-month streak of gains for the industry.

General Motors, Honda and Volkswagen reported double-digit declines for last month. Toyota, Nissan and Hyundai posted smaller decreases. Only Ford and Chrysler reported gains among the bigger automakers.

GM's 11 percent drop was its first since July of last year. It allowed Ford to get within 2,049 vehicles of unseating GM as the top U.S. automaker for the first time since May of 2011.

Most industry officials viewed September as an anomaly. They also downplayed the impact of the government shutdown, assuming it's a short one.

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Kurt McNeil, GM's U.S. sales chief, said the fundamentals are still in place for GM and the industry to rebound in the coming months. Jobless claims are falling, home prices continue to recover, gas prices are down, household wealth is rising and the Federal Reserve has postponed the end of a bond-buying program that kept interest rates low, he said.

"As long as the underlying economic factors are supporting the business, which we believe they will through the end of this year and into 2014, we'll get through this turbulence," said Ken Czubay, Ford's U.S. sales manager.

Jim Lentz, Toyota's North American CEO, said people have grown used to dysfunction in Washington.

Earlier this year, when the government failed to avoid automatic spending cuts known as sequestration, there were predictions that the economy would melt down, Lentz said.

"Basically they were told that when you wake up tomorrow, the Earth is going to stop spinning," Lentz said. "For the most part the Earth didn't stop. And I think that's how they view this again."

The shutdown will only affect sales if it causes credit markets to tighten, Lentz said. That will be a problem, he said, because low interest rates and abundant credit have helped fuel the auto sales recovery.

"Consumers don't like to make big-ticket item purchases when there's a lot of uncertainty in the economy," said Jesse Toprak, senior analyst for the TrueCar.com auto pricing site.